Price Markdowns vs. Marketing

Are you discounting aged cars on your lot without seeing any difference in results? You're not alone. Many dealers turn to price cuts for vehicles that linger on the lot, but slashing prices immediately erodes profits, often overlooking other potential reasons for the vehicle's lack of movement. What if the real issue isn't price, but exposure?

Every dealership faces the challenge of aging inventory. Data from VIN IQ, a comprehensive vehicle data analysis tool, reveals a counterintuitive truth: vehicles often aren't selling due to a lack of Vehicle Details Page (VDP) views, not price. Engagement with the VDP—such as photo clicks or Carfax downloads—indicates that a vehicle is likely to sell soon.

The True Cost of Markdowns

A dealer using VIN IQ’s free Marketing Analysis recently uncovered startling figures: vehicles were marked down by $600,000 in total during the month, and the heavily discounted cars had only received a handful of paid campaign views. It's likely the price decrease wouldn't make a significant impact if the vehicle wasn't getting exposure in the first place. Compare this total markdown of $600K to the marketing budget of $10,000, and you'll agree there's an opportunity to preserve profitability with an updated marketing strategy.

Maximizing Margins through Smart Budget Allocation

VIN IQ's approach is about using a dealership’s marketing budget more strategically. Before marking down inventory, dealers should review the specific vehicle's exposure to ensure it has received enough attention to justify a price drop. Otherwise, you may be discounting a car that nobody knows about.

If you need help tracking the VIN level exposure from your current marketing for the aged units you’re contemplating marking down, contact VIN IQ for a free Marketing Analysis.